WEBVTT - These PwC executives still haven't been held accountable

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<v Speaker 1>From Schwartz Media. I'm Ruby Jones.

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<v Speaker 2>This is seven AM. It was one of the biggest

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<v Speaker 2>corporate scandals the country has ever seen.

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<v Speaker 3>Much of the focus and outrage in parliament House over

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<v Speaker 3>the past week is centered on the extraordinary breach of

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<v Speaker 3>trust at PWC's is.

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<v Speaker 1>One of the most stunning business stories of the year.

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<v Speaker 4>Really, when the torch has been shot upon it, it's

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<v Speaker 4>refused to open itself.

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<v Speaker 2>Up when it was revealed that PwC had used confidential

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<v Speaker 2>government information to enrich itself and its corporate clients. Since then,

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<v Speaker 2>there have been two parliamentary inquiries, an AFP investigation, nine

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<v Speaker 2>investigations by the Tax Practitioners Board, one internal review, and

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<v Speaker 2>an investigation by the international arm of the company. Yet

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<v Speaker 2>important questions remain unanswered. Today Special Correspondent Jason Kotsukus on

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<v Speaker 2>the key questions at the center of the tax leak

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<v Speaker 2>scandal and when we can expect answers to them.

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<v Speaker 1>It's Tuesday, July thirty. Jason.

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<v Speaker 2>When the PwC tax leak story first broke, it was

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<v Speaker 2>a huge story. How quickly do you think you realized

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<v Speaker 2>the scope of what we were dealing with.

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<v Speaker 4>So when the first story was written about this. I

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<v Speaker 4>didn't really understand the significance of what had happened. The

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<v Speaker 4>first story was about Peter John Collins, PWC's former head

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<v Speaker 4>of international tax, someone i'd never heard of, being suspended

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<v Speaker 4>by the Tax Practitioners Board. It wasn't until a couple

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<v Speaker 4>of weeks later that I really understood that Peter John

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<v Speaker 4>Collins had agreed on a strictly confidential basis to help

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<v Speaker 4>the Australian government plan and write multinational anti avoidance tax laws,

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<v Speaker 4>and then before those laws were introduced in twenty sixteen,

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<v Speaker 4>he had knowingly shared what he knew with companies here

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<v Speaker 4>in Australia and overseas and was trying to help them

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<v Speaker 4>avoid the very laws that Peter Collins had helped the

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<v Speaker 4>Australian government.

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<v Speaker 3>Right, they say one partner shared the information, They say,

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<v Speaker 3>we should have had a policy in play.

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<v Speaker 4>Tom Seymour, the CEO, he came out and said, look,

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<v Speaker 4>this is just one bad apple and it was just

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<v Speaker 4>him only he knew about.

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<v Speaker 3>It all to that there is a risk that one

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<v Speaker 3>could perceive with the exact words, that in all of

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<v Speaker 3>his dealings there was a conflict.

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<v Speaker 4>It wasn't until journalist started asking more questions, and that

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<v Speaker 4>the Senate got involved. You know, through Deborah O'Neil and

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<v Speaker 4>Barbara Pocock, that we understood that there were about thirty

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<v Speaker 4>five people inside PwC that knew about it, possibly more,

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<v Speaker 4>and that there were these fourteen clients who'd been provided

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<v Speaker 4>with the advice and had been helped to sidestep the

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<v Speaker 4>new tax laws.

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<v Speaker 5>In recent days, it's become very clear that the PwC

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<v Speaker 5>Price Waterhouse Coopers used secret government information that belongs to

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<v Speaker 5>the Australian people to advise clients how to sidestep new

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<v Speaker 5>tax laws that were under construction.

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<v Speaker 4>That's when it all kind of started to really become

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<v Speaker 4>clear that this was an outrageous breach of trust that

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<v Speaker 4>involved not just one person but the whole of the

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<v Speaker 4>PwC Australia tax practice. Then, I guess, like most people,

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<v Speaker 4>I felt pretty outraged about it.

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<v Speaker 2>I think a lot of people felt that way. In

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<v Speaker 2>your opinion, what has the response from PwC been like

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<v Speaker 2>so far?

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<v Speaker 4>Well, right from the beginning, the then chief executive of PwC,

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<v Speaker 4>Tom Seymour, was anything but transparent about the nature of

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<v Speaker 4>what had happened and how many people knew about it,

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<v Speaker 4>and Tom Seymour's attempts to cover up what had happened

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<v Speaker 4>have kind of been continued by every other person at

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<v Speaker 4>PwC that has spoken publicly about this. They haven't been

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<v Speaker 4>frank and open and honest about what happened. And I

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<v Speaker 4>think we really still don't understand who exactly inside PwC

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<v Speaker 4>received this confidential information from Peter John Collins. And then

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<v Speaker 4>we need to know what companies that PwC tried to

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<v Speaker 4>use that information to win new business with. And that's

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<v Speaker 4>another thing that they have refused to disclose. There was

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<v Speaker 4>an internal investigation that was commissioned by PwC International. They

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<v Speaker 4>commissioned a law firm Link Leaders to investigate. They said

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<v Speaker 4>that they would make that report public, but that report

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<v Speaker 4>remains secret, and I think there's still, yeah, lots of questions.

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<v Speaker 2>To answer here, right, So why is it that that

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<v Speaker 2>internal investigation has not been released as was promised?

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<v Speaker 1>Why is it secret?

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<v Speaker 4>Well, it's a really good question, and despite multiple requests

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<v Speaker 4>from the Senate and the House of Representatives to see

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<v Speaker 4>the report, PwC Global has steadfastly refused to release it,

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<v Speaker 4>claiming that it contains all this privileged information that's confidential

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<v Speaker 4>to PwC, and even PwC Australia Chief executive Kevin Burrows,

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<v Speaker 4>who receives more than a quarter of his four million

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<v Speaker 4>dollars and your salary from PwC International, claims that he

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<v Speaker 4>hasn't even seen a copy of the report.

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<v Speaker 1>Have you read those reports?

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<v Speaker 3>There are no reports, Senator at this one. There is.

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<v Speaker 3>We had investigation that was conducted with them by them,

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<v Speaker 3>and we received legal advice from them.

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<v Speaker 2>I don't know.

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<v Speaker 4>I find that hard to believe, but I guess we

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<v Speaker 4>have to take his word for that. But I think

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<v Speaker 4>the fact that PwC haven't been prepared to release the

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<v Speaker 4>report tells us that there's something pretty serious contained in

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<v Speaker 4>its pages.

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<v Speaker 2>So which PwC executives still haven't been held accountable. That's

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<v Speaker 2>after the.

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<v Speaker 1>Break, Jason.

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<v Speaker 2>On Friday, we'll be hearing more evidence from PwC at

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<v Speaker 2>a Senate hearing. The current chief executive, Kevin Burrows is

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<v Speaker 2>due to speak. What questions do you think that he

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<v Speaker 2>needs to answer.

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<v Speaker 4>I think he could start with telling us how much

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<v Speaker 4>money he makes, because up until now Kevin Burrows has

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<v Speaker 4>obfuscated and dissembled and proved unable to answer that one

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<v Speaker 4>basic question. When he was first asked that question, he

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<v Speaker 4>said his annual salary was two point four million a year.

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<v Speaker 5>Mister Burrow's what is your salary in the role that

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<v Speaker 5>you're in.

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<v Speaker 3>Currently two point four million dollars said.

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<v Speaker 5>Thank you very much, mister Burros, and thank you for

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<v Speaker 5>being a.

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<v Speaker 4>Couple of days later he sought to correct the record

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<v Speaker 4>and inform the Senate that his actual salary was two

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<v Speaker 4>point eight million a year. And then last month Burrows

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<v Speaker 4>advised the same Senator, Deborah O'Neil, the Labor senator who's

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<v Speaker 4>been leading a lot of the investigation on this, he

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<v Speaker 4>was actually getting a one point two million dollar top

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<v Speaker 4>up each year courtesy of PwC International for undefined services

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<v Speaker 4>to the PwC network. You know, Kevin Burrow's salary is

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<v Speaker 4>not material to the fundamental wrongdoing that took place here,

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<v Speaker 4>but it's a kind of measure of his preparedness to

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<v Speaker 4>be open and honest with the Australian public. And if

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<v Speaker 4>he can't answer that basic question, then what does it

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<v Speaker 4>say about the rest of his testimony that he's provided

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<v Speaker 4>so far and that we're can hear on Friday.

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<v Speaker 2>And in terms of Kevin Burrows and the transparency that

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<v Speaker 2>we can fairly expect from him. He took over as

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<v Speaker 2>the chief executive of PwC after the scandal broke, so

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<v Speaker 2>after Tom Seymour was forced to resign. So to what

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<v Speaker 2>extent do you think that we, the public and the

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<v Speaker 2>Senate can really hold him responsible for things that happened

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<v Speaker 2>before his tenure.

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<v Speaker 4>Well, I don't think we can hold him responsible for

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<v Speaker 4>the actions of Peter John Collins and the other partners

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<v Speaker 4>at PwC Australia, but I think we can hold him

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<v Speaker 4>accountable for what's happened since then. So Kevin Burrows is

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<v Speaker 4>career PwC partner. He was based in Singapore and the

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<v Speaker 4>Global Board clearly tapped him on the shoulder and said

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<v Speaker 4>we need you to go down to Sydney and try

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<v Speaker 4>to clean up the mess in PwC Australia. So Kevin

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<v Speaker 4>Burrows has walked into a very messy situation. The partnership

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<v Speaker 4>was effectively involved in a civil war, and he's encountered

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<v Speaker 4>a lot of resistance. I think internally people are resentful

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<v Speaker 4>that an outsider was appointed to the PwC Australia partnership.

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<v Speaker 4>Partnership are resentful that they've all been forced to take

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<v Speaker 4>a pay cut, a significant pay cut. The total staff

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<v Speaker 4>that have been forced out is around seven hundred. So

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<v Speaker 4>it's a very messy situation that Burrows has walked into,

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<v Speaker 4>and I think that he has struggled to contain a

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<v Speaker 4>lot of the internal anger within PwC over what's happened.

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<v Speaker 2>And it isn't only Kevin Burrows who is due to

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<v Speaker 2>come before the Senate, it's also his predecessors, including Luke

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<v Speaker 2>Say who is actually in that role as chief executive

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<v Speaker 2>when a lot of this conduct was underway. So what

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<v Speaker 2>would you like to see him pressed on?

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<v Speaker 4>Well, the thing that I most want to know is

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<v Speaker 4>exactly what Luke Sayers knew about what was happening at

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<v Speaker 4>PEWC under his watch. He's now, of course the president

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<v Speaker 4>of the Carlton Football Club, a real mover and shaker

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<v Speaker 4>in the Melbourne political, social and business circles, and up

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<v Speaker 4>to now he's managed to sort of kind of weave

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<v Speaker 4>his way through all of the flat that has been

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<v Speaker 4>coming his way. But the main focus of the committee

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<v Speaker 4>hearing on Friday has to be to hold Luke Sayers

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<v Speaker 4>to account and really get to the bottom of what

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<v Speaker 4>he knew about what was going on at PwC while

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<v Speaker 4>he was running the show.

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<v Speaker 2>And just finally, Jason, what does it say to you that,

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<v Speaker 2>more than a year on from this story breaking was

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<v Speaker 2>still falling far short of full transparency when it comes

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<v Speaker 2>to what PwC did and didn't do, that there still

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<v Speaker 2>seems to be this effort to contain the damage. Do

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<v Speaker 2>you think that the PwC still thinks that it can

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<v Speaker 2>come back from this, that it can regain the trust

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<v Speaker 2>of the Australian government and the public.

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<v Speaker 4>Well, it suffered a massive hit to its reputation and

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<v Speaker 4>even though I think the firm will survive, it's going

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<v Speaker 4>to take a long time to recover. It wasn't just

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<v Speaker 4>that they effectively stole this information from the Commonwealth.

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<v Speaker 2>You know.

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<v Speaker 4>One of the things that's angered me the most was,

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<v Speaker 4>and we've seen this in the one hundred and forty

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<v Speaker 4>four pages of emails that the Tax Practitioners Board obtained

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<v Speaker 4>from PwC. And what we saw in those emails was

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<v Speaker 4>just contempt for the Commonwealth. They just really took advantage

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<v Speaker 4>of the Australian public here and tried to help their

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<v Speaker 4>clients cheat the Australian taxpayer. Of tax revenue that they owed,

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<v Speaker 4>and I feel that they haven't shown sufficient your remorse

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<v Speaker 4>for the actions that were taken, and I don't think

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<v Speaker 4>it will fully recover until it does offer full transparency

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<v Speaker 4>about what happened.

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<v Speaker 1>Jason, thank you so much for your time.

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<v Speaker 4>Ruby, always a pleasure to talk with you. Thanks very much.

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<v Speaker 2>Also in the news today, Foreign Minister Penny Wong has

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<v Speaker 2>announced plans to limit China's influence in the Pacific with

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<v Speaker 2>a new cable co co activity and Resilience Center designed

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<v Speaker 2>to boost connectivity for Pacific nations. Australia has committed eighteen

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<v Speaker 2>million dollars over the next four years for the center,

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<v Speaker 2>which will be staffed by Australians. It will enable the

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<v Speaker 2>sharing of information and regulation of undersea cables. And A

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<v Speaker 2>commentator has been removed from Olympic Games coverage over a

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<v Speaker 2>sexist remark about the Australian women's freestyle relay team. Eurostar

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<v Speaker 2>commentator Bob Ballard was discussing the gold winning team when

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<v Speaker 2>he suggested they were hanging around doing their makeup. I'm

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<v Speaker 2>Ruby Jones. This is seven am.

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<v Speaker 1>See you tomorrow.